If the demand for product X is inelastic, a 4 percent increase in the price of X will:
A. decrease the quantity of X demanded by more than 4 percent.
B. decrease the quantity of X demanded by less than 4 percent.
C. increase the quantity of X demanded by more than 4 percent.
D. increase the quantity of X demanded by less than 4 percent.
Answer: B
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The cost of inflation to society includes I. the opportunity costs of resources used by people to protect themselves against inflation. II. the diversion of productive resources to forecasting inflation
A) I only B) II only C) both I and II D) neither I nor II
An example of a final service is:
A. a tire to replace your flat. B. a used car. C. getting the oil changed in your car. D. Tires purchased by Ford to put on their new Explorers.
A market is NOT contestable if:
A. existing firms cannot respond quickly to entry by lowering their price. B. there are sunk costs. C. consumers respond quickly to a price change. D. all producers have access to the same technology.
GDP can be calculated by all of the following methods except
A. Adding up the spending on goods and services by business, government, households, and foreigners, and subtracting imports. B. Adding up all income and expenses by consumers and businesses. C. Adding up all of the receipts of households, government, and business. D. Adding up the "value added" at every stage of production in the economy.